Kindred Consolidates Home Health, Grows Revenue

Kindred Healthcare Inc. (NYSE: KND) has reported a year marked by consolidation and significant revenue growth following the fourth quarter of 2015, particularly in its home health division—news that caused Kindred’s share prices to jump about 20% on Friday.

During 2015, Kindred at Home, the company’s home health and hospice arm, consolidated its home health branches by 12.6%, from 427 to 373 sites, according to an SEC filing detailing Kindred’s earnings for the last three months of the year. Throughout this consolidation, average revenue per home health branch trended up by 18%.

Overall, Kindred at Home revenues and core EBITDAR increased to $604 million and $99 million in the fourth quarter, respectively, according to the release. The company’s home health segment saw revenues increase by 4.8% to $358 million.

“Our extensive efforts to grow and diversify Kindred enable us to work through challenges within any individual business, while continuing to advance the enterprise,” Kindred President and CEO Benjamin Breier said in a statement. “We will continue to invest in strategic growth, including a particular focus on investments that help to increase our capabilities as a post-acute benefits management company, preparing is for the ongoing transition from fee-for-service to fee-for-value. …The growth in our Kindred at Home division and Kindred Hospital Rehabilitation Services in 2015, our recent announcements regarding expansion in four integrated markets and our strategic partnership with Inovalon (Nasdaq: INOV) to create a unique set of post-acute benefits management tools and solutions are examples of these capabilities.”

Kindred’s consolidated revenues for the fourth quarter increased by 40.8% to $1.78 billion as compared to the end of 2014, the company reported. This is also up from $1.76 billion in revenues for the period ending Sept. 30.

Core diluted earnings per share (EPS) from continuing operations was $0.33, up from $0.26 in the fourth quarter of 2014 and $0.23 in the third quarter of 2015. Adjusted core diluted EPS was $0.44, compared to $0.38 the year prior.

Meanwhile, Kindred’s hospital division same-hospital revenues decreased by 3.3% over the year before, but increased from $577 million during the third quarter to $594 million.

Whereas in the third quarter Breier indicated that revenue from its $1.8 billion merger with Gentiva Health Services Inc. had not been fully realized, Breier said the acquisition, along with that of Centerre Healthcare Corporation, added $2 billion in revenues to the company’s platform.

“These transactions have strengthened our ability to deliver a full continuum of post-acute care, while also contributing operating results and cost synergies that exceeded our expectations,” Breier said. “Gentiva and Centerre also accelerated the transformation of Kindred’s financial profile, such that today the company is more focused than ever on higher growth, lower capital intensity businesses that generate substantial cash flows.”

Written by Kourtney Liepelt